Large leveraged bets by hedge funds in the U.S. Treasury market could "amplify stress" in global financial markets should rates markets move sharply, the Bank of England said in a report published on Wednesday. Hedge funds have taken record short positions in two- and five-year Treasury futures this year, suggesting that fund managers expect short-term interest rates to continue to move higher. The yield on the 2-year Treasury note fell 10 basis points on Wednesday after touching 5.12% last week, the highest since June 2007. Bond yields move in the opposite direction of prices. Hedge funds, meanwhile, disputed ... (full story)